Finance Act 1946

28 Surtax on income under settlements.

(1) Where, during the life of the settlor, income arising under a settlement made on or after the tenth day of April, nineteen hundred and forty-six, is, under the settlement and in the events that occur, payable to or applicable for the benefit of any person other than the settlor, then, unless, under the settlement and in the said events, the income either—

(a) is payable to an individual for his own use ; or

(b) is applicable for the benefit of an individual named in that behalf in the settlement or of two or more individuals named in that behalf therein ; or

(c) is applicable for the benefit of a child or children"- of an individual named in that behalf in the settlement; or

(d) is income from property of which the settlor has divested himself absolutely by the settlement"; or

(e) is income which, by virtue of some provision of the Income Tax Acts other than this section, is to be treated for the purposes of those Acts as income of the settlor,

the income shall be treated for the purposes of surtax as the income of the settlor and not as the income of any other person :

Provided that the exceptions provided for by paragraphs (a), (b) and (c) of this subsection shall not apply where the named individual or individuals or, in the case of the said paragraph (c), either the named individual or the child or any of the children in question, is in the service of the settlor or accustomed to act as the solicitor or agent of the settlor.

(2) The settlor shall not be deemed for the purposes of this section to have divested himself absolutely of any property if that property or any income therefrom or any property directly or indirectly representing proceeds of, or of income from,- that property or any income therefrom is, or will or may become, payable to him or applicable for his benefit in any circumstances whatsoever:

Provided that a settlor shall not be deemed not to have divested himself absolutely of any property by reason only that that property or income therefrom or any such other property or income as aforesaid may become payable to him or applicable for his benefit in the event of—

(a) the bankruptcy of some person who is or may become beneficially entitled to any such property or income ; or

(b) an assignment of or charge on any such property or income being made or given by some such person ; or

(c) in the case of a marriage settlement, the death of both the parties to the marriage and of all or any of the children of the marriage ; or "

(d) the death under the age of twenty-five or some lower age of some person who would be beneficially entitled to that property or income on attaining that age.

(3) In this section, the expressions " income arising under a settlement ", " settlement " and " settlor " have the meanings assigned to them for the purposes of Part IV of the [1 & 2 Geo. 6. c. 46.] Finance Act, 1938, by subsection (4) of section forty-one of that Act; and Part I of the Sixth Schedule to the [6 & 7 Geo. 6. c. 28.] Finance Act, 1943 (which relates to settlements with more than one settlor) shall have effect in relation to this section as it has effect in relation to the said Part IV.